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SMB Nation: Where Did All the Cloud Supporters Go?

Enthusiasm for cloud computing was (surprisingly) weak among attendees of this year's SMB Nation Fall conference.

• By Rich Freeman
• October 20, 2011

Microsoft is famously "all in" on cloud computing. Is the same true of its partners in the small and midsize business (SMB) market? So far as attendees of the ninth annual SMB Nation Fall conference are concerned, maybe not so much.

Held Sept. 30 to Oct. 2 in Las Vegas, SMB Nation caters to the thousands of mostly smaller IT providers who serve companies with a few to a few dozen employees. While last year's show was packed with sessions about building a cloud service practice, this year's agenda leaned more heavily toward technical content about conventional, on-premises infrastructure solutions. That change stemmed from a poll of potential conferencegoers indicating tepid interest in cloud-related topics, according to Harry Brelsford, founder and chairman of SMB Nation Inc., the Bainbridge Island, Wash.-based company that hosts SMB Nation.

"Less than half our guys are excited about cloud," Brelsford says. "It's a huge cultural divide."

That's a far cry from the unabashed cloud boosterism voiced by Microsoft speakers like Maggie Chan Jones, director, Cloud Services and Office 365 in the Microsoft U.S. Marketing and Operations Group. Launched in June, Office 365 is the latest iteration of the Microsoft online collaboration and productivity suite. According to Jones during a keynote delivered the evening before the conference's official opening, demand for the new product is running strong. "The momentum has just been great," she said.

Doug Fraser, a guest speaker who joined Jones on stage, backed that assertion. Fraser is U.S. Microsoft alliance director and west region sales director for CloudStrategies LLC, a cloud solution provider in Cedar Knolls, N.J. Office 365 is easy to deploy and upgrade, he noted, and its recurring pay-as-you-go fee structure turns software from a capital expense into an operational one. "That part really appeals to customers," Fraser said.

For the moment, however, most SMB Nation attendees are still making up their minds about Office 365. Sessions concerning the solution drew large and attentive crowds, but few in those audiences were actively evaluating the product.

At least one partner who's selling Office 365, meanwhile, is having trouble overcoming his clients' security concerns. "When it comes to productivity tools, they still want to have the data in their own hands," says James Wright, an IT consultant from Jackson, Miss.

Enthusiasm was stronger among conferencegoers for Windows Small Business Server (SBS) 2011 Essentials, which combines on-site backup and file-sharing components with cloud-hosted e-mail and collaboration solutions. Based on a show of hands at multiple sessions, most SMB Nation attendees have successfully deployed that product, available since March, at least once. Adoption would probably be even stronger, presenter Jeff Middleton stated, if more SMBs were open to replacing their ancient implementations of SBS 2003. "Damn thing sticks like it's glued to the floor," said Middleton, who operates SBSmigration.com, a Web site offering advice and tools for performing SBS upgrades.

A similar dynamic helps explain weak initial demand among SMBs for devices running Windows Phone, according to Ed Roberts, president and CEO of Lethos Information Technologies, an IT consulting firm with offices across the western U.S. During a session about developing Windows Phone apps, Roberts noted that many potential buyers are trapped in mobile agreements that preclude them from switching handsets. "Even Microsoft employees have to wait until their contract is up to take advantage of the free Microsoft phone," he said.

For his part, Brelsford is more concerned these days about a longer-term issue: the greying of the SMB channel. "You go to some of the events and it's older guys," he says. "Our people are aging, retiring, even dying."

As a result, recruiting the next generation of SMB partners through outreach efforts at technical academies and other places where young techies gather is among his top priorities for the coming year. In addition to infusing conferences like SMB Nation with fresh blood, Brelsford observes, perhaps those newcomers will also prove a little more willing to embrace the cloud than their aging forebears.